Tariffs are rising. Prices are unpredictable. Cash is tighter than ever.
So how do you plan for growth when everything feels uncertain? With new tariffs creating fresh economic anxiety, many business owners are on edge. But this won’t be the last disruption we face. Whether it’s inflation, supply chain shocks, or political unrest — uncertainty is the norm, not the exception. The key isn’t to resist the storm — it’s to bend like a reed, not break like an oak. Right now, you’re probably wondering how tariffs will affect demand. But this is classic economics:• When uncertainty rises, demand shifts left — people hesitate.• When costs go up, supply shifts left — fewer goods, higher prices.Tariffs do both. So what do you do? The answer depends on your industry and business model. Not every company will be impacted the same way. Some will even grow stronger. In Stoic philosophy, this is called the reserve clause — knowing your plan might get flipped, and turning obstacles into opportunities instead of excuses.
🟢 A Real Example: Starbucks
In the early 2000s, Starbucks was booming — opening six stores a day with a soaring stock price. But by 2007, they’d lost their way. The original vision — a premium, personalized coffee experience inspired by Howard Schultz’s Milan trip in 1983 — gave way to scale-at-all-costs expansion. When the 2008 recession hit, the cracks were obvious. Starbucks had become a $4-a-day luxury with a poor experience. Sales dropped. Stock fell 50%. The brand was floundering. Then Howard Schultz came back as CEO after leaving the company in 2000. He realized the problem wasn’t external — it was internal. The customer experience had been commoditized. The operations had lost their soul. Here’s what he did:• Shut down 900 underperforming stores• Closed all stores temporarily to retrain staff• Launched a customer feedback loop• Rebuilt internal systems to prioritize forecasting clarity and experience metrics like:• Same-store sales• Customer satisfaction• Employee retention• Local economic signals In short: they stopped chasing growth and built a business that could bend, not break. The result? Starbucks doubled its stock price and came out stronger.
🔧 What About Your Business?
Most companies rely on three core engines:• Sales/Marketing – drive demand• Operations – deliver product/service• Finance/HR – maintain clarity, guide decisions During chaos, you don’t just “ride it out.” You adjust operations to drive demand, or you double down on marketing. Either way, the answer lies in the data. Without it? You’re just guessing in the dark. A strong Finance/HR function gives you the tools to turn messy problems into 5-minute decisions. So the real question is:
Are you making your problems 5-minute ones — or letting them spiral for months?
With tariffs, expect higher prices. But what happens next?• A short dip followed by recovery?• A long recession?• Business as usual? You can’t control the economy. But you can know your numbers. You can know where the leaks are. And you can position yourself to grow while others are retreating. If you’ve got a 2-year war chest — this might be your moment to tighten operations while competitors chase clients.If marketing is your bottleneck — it’s time to rethink your offer. Either way, your vision and your data will show you the path forward.
🧭 Want help bulletproofing your business?
Join me Thursday at 11am CST for a free live session:“How Small Businesses Can Survive Uncertainty and Grow Anyway”👉 https://forms.gle/tcSTe74A78wsBiULA
Perfectionism is usually the enemy of done and how we can defeat this monster. We all probably know that one person won’t do something because things are not perfect. The weather isn’t right, they don’t have the right gear, they don’t have the right connections, or they don’t have the energy to get started. Things have to be perfect before they take the next step. However, certainty is a disease of the mind and keeps people in the same spot. Then, the need for certainty will cause them to regress because they can’t grow since all their focus is on not losing.
Focus on doing important things
To be perfect is to be inhuman, so we need to embrace looking at the flaws and gaps, then figure out a way to fix them or get past them. Not every problem needs to be fixed, and using analytics can help someone figure out what they should do. Analytics can help someone solve a problem in six ways.
Make Predictions
Categorizing
Spotting Something Unusual
Identifying Themes
Discovering Connections
Finding Patterns
The goal of life isn’t to obtain perfection but to make progress that leads to many perfect moments. So if someone has a vision for their future and the right strategies, they can use analytics to help them progress by making better decisions on what to do. I use financial planning software to make predictions so I can help my clients reach their financial goals. If someone is not saving enough, the software can show them they’re on track to spend $3000/mo at age 65 instead of $7000/mo. This gap might motivate them to start saving more. If they can’t save the right amount now because 5-15% is too much for them right now, I can advise them to save 1% of their paycheck now and, with any pay raises in the future, save 50% of that and spend the other 50% on their standard of living until they reach the target savings rate. I might need to offer different advice, but having the prediction can help me give the right solution to solve the retirement shortfall. People don’t need to be perfect to reach their goals. They need to make progress, and daily progress can help them predict their future. I also have clients that were saving too much and were told they could start spending more money now on things they want to do, like a sabbatical or vacation, and still be OK with retirement goals. Having the prediction can give someone more peace of mind about what they’re doing without worrying about being perfect with their savings. Trying to be perfect with savings creates a life where someone can’t enjoy other things besides saving. The future is not guaranteed, but we can get a good idea of what will happen and be close to it with a high degree of confidence based on someone’s current circumstances and the path they’re choosing to go down. Ultimately, the goal is to be satisfied with the path when it’s all said and done.
How you do anything is how you do everything
If you were to see how you spend your money and time, you could start categorizing them. With these categories, you can begin to pinpoint why your life is the way it is. If you see that most of your time is spent traveling to work, which gives you 20 fewer hours to do something else, then it might make sense to figure out a way to start telecommuting more so you can have 20 more hours to work on yourself or spend it with family. The same thing can be with your spending. I use a highlight chart for someone’s budget to see how they spend on different categories.
Once you visualize all these categories, you can start to see if you can spot anything unusual. Data visualization can show someone that they spend too much on clothes or eat out too much. The idea is not to have all-or-nothing thinking but to figure out the perfect economy, where you don’t do too much but don’t do too little. It’s hard to make the right decision in your head, and humans are good at spotting patterns. And with the right analytics that shows a picture and story, someone can make better decisions to help them live their best lives. With all the categorization, then someone can start to see what the themes of their life are. If you were to look at my life, you would know I’m an entrepreneur trying to build. Most of my time and money spent is trying to grow my business. This is why I hired an assistant to help with marketing so it can allow me to focus more on strategy for my clients. When looking at how I spend my time and money and the themes they display, I’m better suited to make adjustments to help me reach my vision. Seeing the categories of my life will tell me that I’m not perfect, but then I can empower myself to make changes that will lead me to the theme that I need to have. This is why it’s important to know what type of future you want because a theme will tell you if you’re on track for it or not. This is another issue with perfectionism. It just focuses on the present with no defined future or is very unrealistic because so many things out of your control have to be correct. When there is a defined future based on the variables you can control, you can create an action plan to help you reach this future. For myself, I need 50 tax planning clients to help me do my other goals that revolve around family, social causes, and personal achievement. So when I review my own business analytics, I’m looking to see what I need to double down on and what I should change.
How can your progress move you closer to getting more perfect moments in your life?
Then after seeing your themes, you can start to make connections. If you know that you need to talk to 100 people to get a new customer, that can be freeing. Instead of dreading every “no” you receive, you can say that you’re 99 people closer to getting that new customer. If you’re noticing that you’re not sleeping well, then you can do things to fix that. By tracking your sleep and applying analytics, you might see that losing one hour of sleep makes you 14% less productive. Then after reviewing the data, you can start focusing on ways to improve your sleep and get productivity gains in your work and personal life. 80% of your gains will come from 20% of your efforts, so the idea is to double down on the connections that will give you the most return on your time and money. Then you should delete, delegate, or defer the other 80% from your life. When you’re going after your perfect moments, it requires you to embrace chaos in other parts of your life. You can’t fix everything, so focus on what is essential. Making progress is about having the right behaviors. In public health, I learned about The Transtheoretical Model. Someone might need to undergo these six stages to get a behavior change.
Precontemplation – People are unaware that behavior is problematic or produces negative consequences
Contemplation – People are aware of their behavior but might not be ready for the change
Preparation – People are starting to take small steps to begin adopting the new behavior that is healthier or more productive
Action – People are embracing the new behavior and intend to keep it in their life
Maintenance – People have done the behavior for more than six months, and it is about preventing a relapse
Termination – People quit the behavior and have regressed into their negative behavior.
If someone sees the connection to what stage they’re in, moving towards or staying in the maintenance stage can be more manageable. Analytics can bring self-awareness to your actions and hopefully cause less self-sabotaging.
Do your best
I’m a big fan of all you can do is all you can do. Just make sure you’re doing all you can do. Life can be hard at times, and it’s OK to terminate an effective behavior, but the goal is to get back into preparation and then into action if it’s essential. However, sometimes you need that break to give you a different perception and appreciation of doing that behavior. Gaining awareness can be uncomfortable, and people can use perfectionism as a scapegoat to rationalize a false sense of certainty in their lives. And complete certainty slows things down too much. Most of the time, good enough is good enough. Things should be fine if people are satisfied and getting the desired results. There is not enough time to make everything perfect, and it’s best to embrace the uncertainty of events and know how to work with them. Treat pursuing the theme like a game that takes multiple attempts to get the desired result. Where you don’t focus on what’s missing, you focus on what has been gained or will be. If you can say you are a better person than you were six months ago, and you’re on track to be a better person in six months, then you’re probably doing the right things. Focusing on the gains is much more important than removing gaps or flaws because removing them would require the impossible of being perfect. One of my favorite quotes from the stoics is, “The Impediment to action advances action. What stands in the way becomes the way.” This quote was written 2000 years ago by Marcus Aurelius, the last great emperor of Rome. Out of the 60 rulers, he is known as one of the five great philosopher rulers. Many rulers were not that great, but Marcus Aurelius knew how to work with problems by objectively looking at them and not allowing his ego to ruin his perception. This is what data analytics can do. It gives you an accurate answer on what you should do to remove obstacles objectively and not irrationally.
Looks towards others for inspiration
If perfectionism is holding you back, modeling your behavior after someone’s success can help you make changes to have success. In the Redeem Team Documentary about US Men’s Basketball team, the team in the early 2000s thought they were perfect against their competition because they were 63-1 in the Olympics. However, losses to Argentina, Yugoslavia, Spain, Italy, Greece, Australia, and Puerto Rico showed them that something had to change. So the US Men’s Basketball committee convinced Kobe Bryant to join the team in 2006. The team’s training facility was in Las Vegas, with many highly talented but young players like Carmelo Anthony, Dwyane Wade, and Lebron James. They would go out and have fun and return to their hotels around 4 am, the same time that Kobe Bryant would be heading to the gym. This act showed the team what fundamental professionalism looks like and how it can lead to being a better basketball team that can compete against the world. The team started being more serious about their training, leading to the perfect outcome: winning the gold against Spain in 2008 and another in 2012 with Kobe leading the way. Figure out what is holding you back, and then find solutions to help solve your problem. And with problems, you can’t go around them. You have to go through them. What stands in the way becomes the way. You can do it intelligently or foolishly, but an analytical approach can prevent the latter.
Final Takeaway
The more problems you can solve for yourself, the better your life will get, and you will realize that things won’t be perfect and there will be setbacks. However, failure is rarely fatal if you act honestly. And this honesty will help you see that having a perfect process won’t help you grow.
No matter the setback or length of the journey, the best way to get ahead in most cases is to start taking action as soon as possible then make adjustments as more information is revealed or different resources are available.
I also like to tell people:
In life, there are the things you know, the things you don’t know, and the things you don’t know that you don’t know. And it’s in the area of what you don’t know that you don’t know, where the real opportunities in life are.
The more action you take to help you learn what you don’t know, that you don’t know, will help you take advantage of the next opportunity. And if you train early and big enough, it can allow you to coast for the rest of your life.
The Financial Independence/Retire Early (FI/RE) community is generally about saving as much as possible to hit their retirement goal as fast as possible. Generally, someone needs to save 30 times their annual spending goal in an investment account to reach FI/RE. If you want to spend $50k a year, then $1.5 million is required as a rule of thumb.
The earlier someone starts this journey, the faster they can hit their goal. If someone doesn’t want to do FI/RE, they should still save up for retirement so something is available in their golden years.
Here is a classic example of two folks who want to retire at 65. We have Diego and Laura, who are the same age. Laura decided she wanted to start investing as early as possible at the age of 25. She is going to invest $500/mo until she turned 36 then stop. Diego wants to start investing when things settled down. He decided to start investing at age 35 with $500/mo and won’t stop until age 65.
Most people will assume that Diego will have more money at age 65 because he is investing for 30 years instead of 10 years like Laura, but there is a concept in physics that helps Laura out, which is:
When Diego starts at 35, Laura would have put away $60,000, but at an average return of 8%, her portfolio balance would be $91,195. After one year of invest at the age of 35, Diego will be at $6,224.96.
At age 36, Laura, without investing an additional dollar, will be at $98,790.86. This is a $7,317.84 increase in her value from the previous year and now the mass of the account will do most of the work.
The following year for Laura, at age 37, her portfolio balance is $106,694.12, a $7,903.26 increase in value. Since Laura used her 20s as velocity and contributed $500/mo, in her 30s, she can rely less on velocity and use the mass of the account to help her reach her retirement goals.
So by the time Laura is 65, her account will be $1,077,367, while Diego’s account will be $755,648. Since Diego started later, he doesn’t benefit from compounded interest like Laura. In finance, there is a concept called the Rule of 72, which gives someone a general idea of many years it will take someone to double their account based on their average rate of return. This scenario had an average return of 8%, so an investment portfolio should generally double in size every nine years.
Laura has more one more compounding effect than Diego because of when she started, and she has a much larger account that can double when she is in her 60s. If the investment portfolio is at $500k at age 52, it can be $1,000,000 at age 61.
Having this mass gives Laura more choices for her budget when she is in her 30s, 40s, 50s, and 60s. Instead of putting $6,000 into an investment account, she can put that money to use in other areas.
Laura could decide to continue to invest, so she hits retirement faster. She can spend that money on vacations and see parts of the world she always wanted to see. For $6,000, she can probably see two places a year with the right deals. It really comes down to someone’s goals on what they should do.
Final Takeaways
The best way to predict the future is to create it, and this happens by having financial, social, and human capital with goals that have an action plan. When you have these resources with the right focus, you can have the freedom to do other things that could be more valuable to you, but they have to be earned.
I joined the Marines when I was 18 years old, and now I have two bachelor’s degrees in Public Health and Economics, and an MBA, which was all paid for because of my GI Bill and how I created my education plan. These accomplishments required creating goals and then a plan to reach those goals. Some sacrifices had to be made, but now that I’m 35 years old and have less energy, I’m glad I made those investments to give myself the freedom I have now.
The best time to plant a tree was 20 years ago, but today’s next best time. Putting things off is not an excellent strategy to create a good life generally, but it’s perfectly fine to choose Diego’s method as well. Just make sure it was a thoughtful plan and not something forced upon you. We get to decide what the future can be, but it requires today’s actions to get that future.
There are people I’ve come across that retired in their 60s but started to run out of money at the age of 72, and they’re not fun conversations to have. So the less I can have these conversations, the better the world will be. So have a plan and figure out a way to increase your assets to have the momentum to reach your goals and not run out of gas.
I’m big into taking personality tests because they help understand who I am, and particularly I like DISC. After taking the test, I found out I was Conscientious as my primary personality, which means I like to plan things out. My secondary personality is Dominance, which makes me very good at executing tasks that I set my mind to. Like with a lot of stuff, people are not 100% something. They are usually a blend, which helps create a person’s personality.
https://www.123test.com/disc-personality-test/
Genetics are only part of the equation that makes up a person. Environmental also help determine the behaviors that we adopt and who we become.
The environment involves what we learn from others, the people we interact with, the resources we have access to, and incentives that we think are important. The precede-proceed model shows how these factors influence our behaviors, affecting our quality of life.
Conceptualization of the precede proceed model of health promotion: Green and Kreuter
Once you understand all the factors that go into your behaviors, someone can create a program that improves any deficiencies that causes them not to have the right behaviors that lead to a higher quality of life. A program starts with education, followed by executing a plan that will help someone change a deficiency that keeps them from improving their life.
Reinforcing factors could be the people in someone’s life, such as having a close friend who is obese, which increases someone’s chance of being obese by 57%. This outcome is likely because the close friend’s poor dietary habits and physical activity will reflect upon the person.
If you have been in a group setting, you will probably notice that you eat more, since the average person will eat 30-50% in a group setting than alone. We tend to mirror the habits of others, and if someone else is eating, it will make someone want to eat as well.
The First Step Towards Progress
It takes a lot of self-awareness to overcome these obstacles to adopt the right behaviors, but self-awareness is where a lot of progress starts and that comes from being educated in the right areas. And it’s essential to be educated because the average person has to make 35,000 decisions a day, and it’s effortless to make a couple of bad decisions if someone is unaware of them, which can lead to a downward spiral. It’s okay to make a bad decision but don’t make a bad decision twice in a row because it is a choice after that.
Each section of the Precede-Proceed Model has subcategories that could be preventing someone from making progress on their goals. So weekly, we should find where the bottlenecks are and then figure out a way to remove them.
Instead of improving results in one area by 50%, it tends to be easier to improve a bottleneck by 10% in seven different areas. In most cases, focus on small changes to build up your momentum and confidence.
Knowing why you should do something will make it easier to change since it will clarify why you should do something and be motivated to make it happen.
How To Ramp Up Progress
One of the best ways to get progress is to treat your life like a business. When I do business consulting and use my Grow With Joe Business Road Map, I start by creating the vision. I ask people where do they see themselves in ten years. This will help me know what they should focus on and what they shouldn’t focus on because if everything is important, then nothing is important. Then the vision won’t become a reality.
This ten vision will require them to know how much money they will make, what the systems are, what the organizational chart will look like to make their goal a reality, and how this lifestyle will affect their personal life.
Then they figure out the clients they need to work with and the service or product they will provide. This exercise helps people visualize their future, and if you can see something happening, then the odds of it happening increase.
Then I ask people what their lives should be like at three years to make sure they hit their ten-year vision goal. Then, it goes to what life needs to look like one year from now to make the ten-year vision a reality.
Now obviously, things are going to change, but accumulating resources gives someone options, and options can give someone freedom to choose what their present situation gets to be.
When I do financial planning, my real goal is to help people accumulate financial resources, put systems to protect their finances, and help create the right behaviors. For example, suppose they don’t want to use their retirement funds to purchase a beach home. In that case, they can use it for something else—a much better decision to make than figuring out how to use a $957 monthly social security check to cover all your monthly expenses.
I also try to tell clients to focus on the present because today is the oldest they have ever been in life, and today is the youngest they will be for the rest of their life. However, it requires perfect economy where someone doesn’t do too much and doesn’t do little to live in the present and prepare for the future.
How To Stay On Track
Implementing this perfect economy requires knowing where someone wants to go, what resources they have, their capabilities, and who they want to be. The resources and capabilities can change with time and effort, so perfect economy will probably take a while to reach and require some tinkering to find the right balance on living life.
Once the vision is formulated, it requires setting numbers that someone needs to hit weekly to make sure they’re making progress. Having numbers to hit gives people a sense of competition.
I keep all my planning notes and the numbers I need to hit in the cloud so I can access them from anywhere, and I check every week if I’m making progress on my goals. If I’m not, then I ask what needs to change to make it happen. It is effortless to push planning, tracking, and reflection to the side, but one minute of planning saves someone ten minutes on execution, and what gets measured and tracked grows exponentially.
In my practice, I like to do annual progress meetings where people see their progress on their goals and see if updates need to be made. The goals might have changed, but as long as they have accumulated resources and capabilities, much less work needs to be done to make things happen.
How To Make The Right Progress
It’s also vital to set metrics on effort and not outcomes. Outcomes we can’t control, but we can control our actions. If you focus on doing the right things, then the score will take care of itself, but it requires constantly checking if your effort is in the right place. Working hard in the wrong areas just causes someone to get frustrated.
If someone’s predisposing factor is that they can only type at 20 words per minute, then instead of taking 3 minutes and 45 seconds to write 300 words, which is about four small paragraphs, it will take someone 15 minutes. Multiply this effort over a day. The person doing 20 wpm will fall dramatically behind the person who can do 80 wpm. So it’s essential to train in the right areas to get the results you want and to get them as fast as possible.
You still want to set a goal focused on outcomes because they can help with the effort goals. If you see that your income goals are falling short, you can catch the problem when it is small and manageable. This outcome is better than waiting a month out before going bankrupt to make changes. They shouldn’t be the main focus but should be monitored to ensure your effort is in the right place.
How Not To End Up In The Wrong Place
Life is all about making adjustments, and it is best to think about this quote on why you shouldn’t stay the same and strive for progress.
If you want things to stay the same around here, something has to change.
The environment is constantly changing, but we can stay ahead of this change by increasing our human capital, social, and financial assets. This accumulation of assets will cause problems to become five-minute problems. It takes a lot of discipline to keep this schedule, but discipline creates freedom. Having the discipline to maintain emotional and mental strength will make it easier to say no to the distractions and focus on your growth, then in the future, you will have the resources to enjoy life more.
Someone with $4 million saved up after 45 years of investing will have more options than someone who has zero after 45 years. Having $4 million can be done by putting $540.18/mo into an investment account, which requires finding a job that pays $64,821.60, investing 5% of the salary into a retirement while getting a 5% match, and averaging an 8% return.
This $4.5 million, along with social security, should give someone about $16k/mo for 35 years in today’s dollars. So if someone chooses to save less in the future because they only want $8k/mo, they have the flexibility to do so and can use that money for other things.
The Traits For Making Progress
So once the vision and numbers are created, planning and executing are next to follow. And with almost every goal worthwhile, it just takes consistency. To keep going on your vision, just follow this quote in the San Antonio Spurs’ locker room.
“When nothing seems to help, I go look at a stonecutter hammering away at his rock perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow, it will split in two, and I know it was not that blow that did it, but all that had gone before.” – Jacob Riis.
But if the blows are all over the place, then it will take more than 101 blows to split the rock in two, and someone might quit, but if there is a focus with the proper technique, then proceeding forward won’t be an issue. So then you can accomplish your goals a lot faster than other people. So when you’re on your tenth rock while everyone is still on the first rock, you can look like a superstar and build up your reputation for getting things done.
This reputation will give you more influence in your community because you’re reliable for getting things done. If people know the value they get from you, they will pay a higher price.
I tell people that one hour with a professional saves the amateur 8 hours. So if someone values their time at $50 an hour, and if the professional takes 2 hours to do a task, it can save the amateur 16 hours, which is worth about $800. The price can increase if the professional adds other savings and creates value in other areas.
Instead of the amateur trying to focus on everything and not being good at anything, they can focus their time on what is essential and improve their craft. Telling someone they will save 27 months by going with you and not spending that time in school can be very valuable, but the buyer needs to be educated on this value provided before they buy.
Follow The Process
So by understanding your goals, having the right strategies, and then having a plan that strives to hit specific KPIs, progress can happen a lot faster.
In life, everything is connected, and it just takes one deficiency to ruin or halt progress. So there needs to be time to partake in maintenance and reflection. People should spend a couple of days every year to review the past year and see what needs to happen to make the next year even better. Otherwise, the person is just drifting and being pulled in a direction that society wants them to go in, which will never work out for someone.
It’s up to the person to determine their destiny. Still, it requires a person to be strong enough to do so, which is why I recommend people to work on themselves physically, mentally, emotionally, and spiritually every day. If people do this, the score will take care of itself, and people will live a life according to them.
We only have one life to live, so we might as well make sure we play the game right to win our game.
7.20% for parents and graduate students taking out PLUS loans
Under President Biden, federal loan payments are expected to come back in May after extending the pause on federal loans from February 2022. Student loan borrowers should look at their options now to see the best one to take.
A Common Scenario For New Federal Loan Borrowers
The standard term for paying off student loans is ten years, so an undergrad with 4.60% will have a monthly payment of $337.05 if they have $32,371 in federal loans.
The average salary for a college graduate is $55,260. From my experience, a single person from Oregon would have a budget something like this.
Gross Income $55,260 Taxes and other deductions 5% contribution to traditional 401k – $2,763 Federal Taxes (7.68% effective rate) – $4,245.40 State Taxes (5.58% effective rate) – $3,083.17 Health Insurance Premiums (Bronze Plan for 21 year old) – $3,348.00 Social Security Tax (6.2% rate) – $3,426.12 Medicare Tax (1.45% rate) – $801.27 Oregon Worker’s Benefit Fund (2.2 cents per hour worked) – $45.76 Oregon Transit Tax (0.1% rate) – $55.26
Tax Savings Student Loan Interest Deduction (first year of paying off loans) – $272.55
Take-home pay $37,764.54 for the year or $3,147 a month
Expenses Student loans – $337.05 Rent, utilities, and internet (with a room mate) – $1000 Groceries – $300 Gas – $240 Cell phone bill – $75 Car insurance – $90 Car payment – $250 Streaming services – $60 Gym membership – $40 Savings – $150 Total expenses – $2,502.05 Left over – $644.95
As a rule of thumb, I like to tell clients to save 5% of their take-home income until they reach $10,000 in savings. This will help establish the emergency fund, but more can be saved and should as someone gains more responsibilities. The rest of the take-home pay can be used for entertainment, clothes, gifts, personal development, additional investing, or paying off their student loan debt.
This is a very simple budget for someone and will change depending on someone’s circumstances. But in this scenario, the student loan borrower has some choices to make and can choose one of the following tracks to get rid of their federal student loans.
Pay Off Student Loans From Income
If a borrower has the capabilities to pay off their student loan from their income, they can general do so in the following ways.
Pay off the student loans over the standard ten year period This will cause the borrower to pay back $40,446 over ten years, making $337.05/mo payments
Pay off the student loans over the standard ten year period with an extra $100/mo payment This will cause the borrower to pay back $38,460.40 over 7.41 years
Pay off the student loans over the standard ten year period with an extra $200/mo payment This will cause the borrower to pay back $37,056.45 over 5.83 years
A borrower could also choose the extended payment plan up to 30 years. This would cause the borrower to have a monthly payment of $165.95/mo but pay $59,742 over 30 years.
A borrower expecting huge pay raises over the next couple of years could be a good candidate for refinancing, but again it all comes to making the financial projections.
Go For Student Loan Forgiveness
If a borrower is going to have trouble paying off their student loan, they can get on one of the four repayment plans, which would require the borrower to consolidate their loans and have a new weighted interest rate.
To make things simple in this scenario, we’ll say the weighted average turns out to be 4.60%. The four repayment plans are based on the type of loan and when the loan was taken, but here are the general guidelines for the four repayment programs.
REPAY – pay 10% of income for 25 years
PAYE – Pay 10% of income for 20 years
Old Income-Based Repayment – Pay 15% of income for 20 years
New Income-Based Repayment (for borrowers after 2014) – Pay 10% of income for 20 years
Income Contingent Repayment – Pay 20% of income for 20 years
If a balance is left over after the forgiveness period, the forgiven amount is taxable. So if someone had $50k forgiven, that money would be added to someone’s tax return, and the taxes on this amount in this scenario would roughly be $15k. So it would be wise for the person seeking forgiveness to start saving $30/mo in an investment account to pay for the taxes in 25 years.
A loan forgiveness payment is based on someone’s Adjusted Gross Income on their tax return. The main ways that someone can lower their AGI for student loans are:
File Married Filing Separately.
This is mainly done if one spouse makes significantly more than the other spouse and has a lot of student loan
Make a contribution to a tax-deferred account like a traditional 401k or traditional IRA
Make a contribution to a Health Saving Account or Flexible Savings Account
Take Business Deductions
Then the borrower gets to subtract the poverty guideline level, which is different from state to state. For Oregon, a single person would use $11,770 as their deduction. So if the borrower is on REPAYE, their monthly payment would start at $301, but every year they need to recalculate their monthly payment by submitting their new AGI. Assuming a 2% increase, their final payment would be $383.89 per month, and would have paid off the loan in 10 years.
So, in this case, it wouldn’t make sense to seek loan forgiveness at this salary and loan amount since they standard payment amount is lower over ten years at $40,446 vs $40,993.34.
When Seeking Loan Forgiveness Makes Sense
Let’s say the loan balance was $100k instead. Then the ten-year monthly payment would be $1,041.21, which would make the borrower’s budget tighter. Then getting on REPAYE would make a lot more sense to the borrower because their monthly payment would be $313.33 at a salary of $55,260 and would have $91,688.70 forgiven, which could create a potential tax bill of $20,171.51 and would require someone to save $33.87 for the 25 years.
Whatever choice someone makes, whether making the standard payment or going for loan forgiveness, it’s tough to switch afterward. So it is best to know which is the right path to go down from the beginning. And sometimes, it’s best to go down loan forgiveness than try to pay off the money.
Someone could save the difference and invest and come out ahead. This is a strategy that many doctors use to pay off student loans. The numbers show that their high salary and high student loans make more sense to go for forgiveness. Psychology, it can be challenging to continue paying the loans for 20 or 25 years, but financially it can be the best decision.
If someone can get on Public Service Forgiveness, then loans get forgiven after ten years versus the 20 or 25 years, plus whatever is forgiven is not taxable. So this might be someone’s plan for the first ten years of their career before they pivot into the private sector.
The Last Option But Least Desirable
The last choice someone can make is not to pay off their student loans, which should be the last resort, and the borrower should call the loan provider to make arrangements to get back on track. If someone can’t pay back their student loans, this will typically happen.
After 90 days, the account will be labeled as delinquent, where the three credit agencies will be notified, and someone’s credit will take a hit. So borrowing or getting services like a cell phone plan will be difficult or impossible. Renting a home can also be very hard.
After 270 days, the account will be labeled as default, and the federal government can use its powers to garnish someone’s wages, tax return, or social security in the future.
Know The Deal Before You Accept The Deal
As you can see, paying back student loans is not always straightforward, and borrowers should recognize the deal before they accept it. This blog post can’t cover everything so someone should use it as a general guideline to explore what they should do before committing to a particular plan.
As a rule of thumb, someone shouldn’t borrow more than 50% of their anticipated salary. I understand that specific careers are very competitive, require higher educations and still don’t pay a wage that covers the cost of the education. Realize that if this is the case, being on a loan forgiveness program for 20 or 25 is probably the best-case scenario. Still, if it means they’re in a career they love, then that person made the calculated decision and should be okay with the ramifications.
As a financial planner, I can help people with these student loan scenarios and let them know the deal related to other financial planning scenarios like retirement. Then it is up to the person to decide the path they want to go down. And as a business consultant and career coach, I can help people navigate their career or business to give them the strategy and plan to help them increase their earning potential.
Overall, there are tons of ways to make it happen. It starts off by knowing how to make it happen and then doing the work.
If you think someone can benefit from reading this basic scenario, please share it with them. It could prevent a lot of headaches down the road.
*Before you make any changes with your financial situation, please do your research or consult a professional to ensure you’re doing what is best for you*
If you don’t know what a SMART Goal is, it is an acronym that stands for:
S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-bound
Someone can create a SMART goal, but that doesn’t mean they stick with it. It’s best to figure out the why first for a SMART goal because when something comes up and makes finishing it more difficult, someone is more likely to abandon it. This person will be okay with this decision because it wasn’t that important. I’m not too fond of SMART goals because it starts at the wrong place for most people.
Starting with why first will give someone that passion and grit to keep on their goals because they know it will help them become the person they want to be. I do financial planning and business consulting because I want to give others more control over their lives. This is important because I would travel to Mexico as a kid and see the lack of opportunities in my dad’s small town, which can slow someone’s development.
How To Find Your Why
I also saw how a lack of opportunities could cause a lot of stress and dysfunction in your environment, community, and family. So I want to change that for the people I interact with, and I can see how my life can be better off for choosing the plan I’m following.
To get to this level of understanding, it’s best to ask five why questions, and the framework goes something like this.
I want to do financial planning and business consulting. Why?
Because I want to help, people make better decisions with their money and business. Why?
Because being poor with your money and business can cause a lot of stress. Why is this important?
Because growing up, money could be emotionally stressful, and I feel that business is the best path to control your life. Why is this important to fix?
Because we shouldn’t live stressful lives since life is short, this will make the world a better place for me, my family, and my community, and I’m good at this and passionate about it.
Once you understand yourself, you can start being who you want to be and won’t get distracted from becoming that person. And in this world, it is effortless to get distracted with imposter syndrome, low self-esteem, lack of confidence, and lack of understanding of how things work.
You will always have to answer questions about yourself, and the answers can change depending on the new information provided. I wanted to get a stable job at the federal government ten years ago, but I only lasted eight months at the Pentagon after I discovered that this would not give me control over my life. With interactions with friends, I found out I should do financial planning, and I could handle the instability of being an entrepreneur and keep going when times got tough because of my skills and why.
The Path Towards Your Why
Then, to make things more successful, I needed to strengthen my strategies to help me become who I want to become. I did this by reading, listening to podcasts, continuing my education, attending conferences, meeting folks, and getting certifications.
As Mike Tyson said, everyone has a plan until they get hit in the face, and on average, every 90 days, something is going to go wrong in your life, either financially, emotionally, socially, or physically. And if you have the right tactics to deal with these setbacks, then those problems go from long-term to five-minute problems. And this is the outcome you want with the tactics you use.
Once you have the why and the how down, you can develop your SMART goal. This will make it much more effective and increase the likelihood of finishing the time-bound part. This is the plan to help you become the person you want to become. And the plan can change, so be flexible with this part but be stubborn with the outcome you want.
What Is It All For?
Ambition can be one of the hardest things to contain if you have the right why. You will spend more time on the plan and give more effort, and then you will become an A-level player in this domain. And you have to realize that A-players are 32 times more effective than B-players. So it’s best to find your niche and what you want to be the best at, then reach the outer limits of your human potential. Life is valuable because it is short, so you might as well fill it up with things that make you go and be the best person possible. If we all did this, the world would be a better place.
Also, realize that the world is an anvil, and you’re the hammer. If you try to force things against the world, you’re going to break yourself, but if you know how to use your skills with the world, you can create an extraordinary life. This journey starts with discovering and understanding your why.
When it comes to investing, the three components that help someone be successful are:
The amount you invest
The time that the money is invested
The rate of return that the investment gets
The two components that someone can control are the amount they invest and how long they invest. If someone only invests $10 and gets a 300% return, they only make $30—a great return but not a great outcome.
If someone only invests $1,000 for ten years and averages a 10% return, they will have $2,593.74. At the same time, an average of 10% for 40 years will give some $45,259.26.
The rate of return that someone gets is out of their control, but they can use strategies to influence their return, like knowing that investing in stocks outperforms bonds 99% of the time over 30 years. Below is a Callan chart showing how different asset classes have performed over 20 years and can help someone decide where to invest based on their financial risk tolerance.
*I am not associated with J.P. Morgan but they have great information*
Let’s say we have two single people making $100k, and one contributes $10k to their traditional 401k, while the other contributes $10k to their Roth 401k. They both invest in the same exact investments for 40 years and average a 10% return. This $10k contribution would be worth $452,592.56. But the person who did the Roth had to pay an extra $2950 in taxes when they contributed the money, assuming they are in the 24% federal tax bracket and a 5.5% state tax bracket.
What Are My Choices?
The person who did the traditional has an extra $2,950 today, and they have three choices:
spend it
save it
invest it
All three options can be valid, based on the person’s situation. They might want that money to go on a vacation with their family because they know they are on track for their other financial goals like retirement. They could save it and replenish the emergency fund that they had to use to fix their car. Investing could be another option.
Investing $2,950 for 40 years at a 10% return could get the person an extra $133,514.80. This scenario also assumes that the person doing the Roth can’t afford the $18,368.78 to match the $12,950 that the traditional person can do.
The decision to invest depends on someone’s capabilities and investment choices. If someone wants to start a business in a couple of years but still wants to invest, the traditional path would be the best. The person would get access to the cash faster and hopefully get a higher return from the business. A business can grow more quickly than stocks, but more risk must be accepted, and more work must be done.
Thinking In Terms of Value
As you can see from the Callan chart, nothing stays at the top consistently. What matters most with growth and getting the most value is your annualized rate of return and limiting your volatility, which can be achieved by creating a diversified portfolio.
Think of rates of return as the new valuation of an asset. If a company was worth $1 billion in 2020 and then was worth $1.1 billion in 2021, then everyone’s investment in this company would have risen by 10%. There could also be a decline in a company’s stock, but that is a new reflection of the company’s valuation at that moment in time.
So if you can see that something is going to be more valuable in five years versus forty years, then you can take the calculated risk to put your money in an asset that will give you the most expected benefit. Don’t forget this asset could be yourself as well.
If you can turn that $2,950 into $133,514 in five years versus 40 years or more, that will also be more valuable. Understanding the expected value of your decisions can help you make the right move but requires planning to increase the likelihood of success.
There are trade-offs and opportunity costs for choosing one tax-advantageous account over another (don’t forget about Medicare taxes and required minimum distributions). Still, it is easier to know which direction to take if you know your goals (or the value you want). Then you can use strategic planning to turn your good situation into the best situation by creating or obtaining a plan that you can execute.
Final Takeaway
Overall, understanding the marginally benefits for each decision can help you make the best moves possible. This type of thinking requires having the wisdom to create the plan and then the discipline to follow through. And the fastest way to make your goals happen with the right strategies is not to ask how I can make this happen, but who can show me the route faster since one hour with a professional saves the amateur 8 hours.
If you don’t know what direction you should take, it doesn’t matter which direction you choose. So spend some time thinking about what you want to happen in 2022 and beyond, then make it happen.
P.S.
I’m doing a webinar on Tuesday, Jan. 18th, 2022 at 4pm CST on how to pick the right tax strategies for your investment accounts. Click here to sign-up.
Now it’s so much easier to partake in crypto, where 55% of people surveyed who owned bitcoin in 2021 said it was the first year they participated. How people will use cryptocurrency is still unclear but should generally fall into the categories of transactions, storing value, NFTs, and smart contracts. And cryptocurrency technology is moving so fast that many governments are taking a long time to regulate it.
Old Way vs. New Way
At the beginning of October, I attended a webinar about cryptocurrency and how financial planners should start thinking about it. The biggest thing I got about crypto is that it uses authentication to facilitate transactions versus our standardized financial system of trust.
The primary financial industry requires a lot of intermediaries to facilitate transactions, and for each transaction, a fee is tacked on. We have to trust these institutions that they will do the right thing, and we have regulator agencies that are supposed to check these institutions to ensure they are doing the right things. It’s a very centralized system that has created a lot of efficiencies but is prone to fraud issues because these intermediaries have all the information, and buyers and sellers don’t.
Crypto uses authentication to facilitate transactions by using the blockchain ledger to record those transactions. Then computers on the network authenticate those transactions to ensure everything lines up. This prevents double spending on a digital coin. Theoretically, a bank could keep two accounting books and lend out money that is not supposed to be lent out because it was already spent somewhere else. Since this system is based on trust, we need to have other organizations check to see if people are doing the right thing.
Since the authentication has to be done on many different networks, this can cause a transaction not to go as fast as picking a central location to facilitate the transaction. And within cryptocurrency, some coins choose to be more centralized to help with efficiencies. Some want to stick with decentralization, which takes longer to process transactions but maintains a purer sense of authentication.
There are a lot of smart people trying solve all these issues, so we’ll see what solution the majority end up on in the future.
The Tax Loophole That Will Probably Close in 2022
The SEC is in charge of regulating securities, but cryptocurrencies are not securities yet. This could change in the future if Congress decides to place cryptocurrencies into this field. And it looks like they will at some point with the new Build Back Better legislation. In the current version passed by the House, they want to close a tax loophole on cryptocurrencies that allowed people to claim losses on dips in the price of cryptocurrencies which creates a tax deduction. Then participate in the gain on the price that can’t be done with regular securities like stocks.
For example, if a stock goes down from $100 to $70, and someone has 1000 shares, this creates a $3000 loss unrealized loss. Suppose that investors believed that the price drop was temporary, like what investors saw in March of 2020 when covid-19 disrupted the markets before the Federal Reserve stepped in with monetary policy and Congress with Fiscal policy to keep the security markets afloat. An investor could have predicted that the market would recover and sell their shares at the bottom to realize the loss, which would lower their taxable income by $3000.
The investor would have to wait 30 days to buy back the same or similar securities to keep that loss for tax purposes. The investor could have chosen to invest in another area and be fine, but if they wanted to invest in the same stock or industry, they would probably be facing the wash rule and wouldn’t get that tax reduction.
This wash rule only applies to securities, so investors could have sold their cryptocurrencies at the dip for the past ten years to get the tax deduction. They could have bought their cryptocurrency the same day with a substantial economic motive and benefited from a rally. This would also reset their cost basis to a lower amount and, with the right strategy, get more long-term gains on their asset. But in 2022, the wash rule will probably apply to Cryptocurrencies once Build Back Better is passed by the Senate and signed by President Biden.
How Someone Could Use The Tax Loophole
In December, many cryptocurrencies took a hit. If someone has any cryptocurrency positions in the red, they might want to take advantage of the Wash Rule by harvesting the losses. This might not be easy because some exchanges don’t allow picking the cost basis method. They only enable First In, First Out for reporting cost basis, which means that the first coin bought is the first one to be sold. FIFO is not a good strategy for tax-loss harvesting since the first coin someone purchased could have unrealized gains.
So what needs to happen is that someone needs to pick the positions that are unrealized losses if they want to take advantage of the wash rule. So it is best to check with your exchange to see what is possible. It might even make sense to switch to a different exchange to perform this tactic.
If the gains from tax-loss harvesting are more significant than the effort, it makes sense to participate in this strategy. Suppose someone has $10,000 of losses and is in the 24% tax bracket and 9% state tax bracket. This person could claim $3,000 in loss this year and save themselves $1,020 in taxes in about 30-90 minutes’ worth of work if they know what they are doing and keeps a good set of records and documentation.
If the money to be saved is $10, it is not an excellent strategy to follow. Make sure the juice is worth the squeeze. The rest of $7,000 in losses can be carried forward to the following years until they are used or offset by other gains, which could result in additional tax savings of as much as $2,380, or $3,400 in total.
Know The Deal, Before You Accept The Deal
The future will change how we interact with our environment, but it will also use some past rules to determine that interaction. With the wash rule being applied to cryptocurrencies, look for more adoption by governments and the general public in the crypto space. So it would be wise to understand supply and demand, how wallets work, taxes, and other things related to this space.
And if you understand the field, the domain, and the skills required to take advantage of any future opportunities, you will be more prepared for them. So continue to be a life-long learner, so you have fewer “wondered-what happened” moments and more “I made it happen” ones.
*I’m not an expert on everything about cryptocurrencies, and I’m not a tax preparer. This is general information, and people should do more research on their own or seek out a professional to help them in this space since other considerations need to be made if utilizing this strategy.*
*Links to other sites are for educational purposes and not endorsements*
If you look at social media, you have a bunch of money coaches who say the Roth is the best thing you can invest into. Whenever you hear all or nothing advice, you should question if that advice is the best thing for you. It could be good for you, but is it the best thing for you?
It all depends on your situation and your goals, which should determine what you should do with many things in life. With it comes to investing in tax advantage accounts, there are two options tax-deferred and tax-free. The tax-free label is misleading because these accounts use contributions that have already been taxed. Then the money grows tax-free. While a tax-deferred account will receive a tax break now and then gets taxed with the money is withdrawn.
Let The Numbers Help You Decide What’s Best
In 2022 someone can fund an employer-sponsored plan like a 401k at $20,500, and an Individual Retirement Account (IRA) can be funded at $6000. If someone decides to fund this account(most of the time, they should), they need to determine whether they want to make tax-deferred or tax-free contributions. If a single person is making $100k per year and saves the entire $20,500 into their 401k, it is not as simple as just saying they funded their account at $20,500, since the person needs to look at their tax situation today versus when they plan to withdraw the money.
A $100k salary and filing taxes as a single person are most likely going to cause them to take the standard deduction in 2022 of $12,950. This deduction would drop their marginal tax rate from the 24% tax bracket to the 22% tax bracket.
So if they invest $20,500 into a traditional 401k, they would save 22% in taxes in 2022 and whatever their state tax rate is, but in this example, we’ll say 5%. The person would still pay social security and medicare tax on their full salary, so this doesn’t have to be considered. So the total tax savings for 2022 would be 27%.
If someone decides to invest in the Roth option, they would have to fund the account with after-taxed dollars. So the amount required is $28,082.19 since 73% of this amount would be $20,500. This Roth contribution would cause the person to spend an extra $7,581.19 in taxes in 2022, while the person doing the tax-deferred account would save this amount in taxes for 2022. Someone might benefit from having that extra $7,581.19 today and could benefit from lowering their Modified Adjusted Income so they could deduct student loan interest. Still, it all depends on someone’s situation.
When it comes to funding both accounts, under the right circumstances, there is no monetary advantage. A person who saves $20,500 of their income and funds a traditional account can invest the full amount, while the person doing the Roth can invest $14,965 because the effective 27% tax rate has to be applied. And if we look over 35 years, we can see they are the same
*Assuming an 8% rate of return
Tax-Deferred – $20,500 in 35 years is $303,099.56
Tax-Free – $14,965 in 35 years is $221,262.68
With the $303,099.56, if someone is going to be in the same tax rate of 27%, then the purchasing power of the $303,099.56 is $221,262.68 because of the tax. So as long as someone is going to be in the same tax bracket, it depends on when someone would want and need the tax break, either on the contribution or the withdrawal.
Understand How Your Situation Is Dynamic and Not Static
Other things to consider are the tax bracket they will be in when they contribute and withdraw. If someone will be in the 35% tax bracket in 2022 but will drop to 12% in 2060, it probably makes more sense to do the traditional. And vice versa with the Roth, if someone is going to be in a lower tax bracket today, and a higher one in the future, then it makes more sense to do the Roth in most cases.
Overall, the better strategy is to have both accounts and fund them based on someone’s income situation for the year. Here is an excellent chart from Kitces.com that shows an example of how someone should fund a traditional or Roth account.
Whatever someone does, they should know what will give them the most options now and in the future and understand the tradeoffs for making one decision over the other. But doing this type of analysis requires knowing your goals, your income capabilities this year, and the current and future tax situation, maximizing your opportunities.
Here is another chart from Kitces.com that shows the benefit of optimizing both accounts based on someone’s unique situation every year.
What It Takes To Know The Deal
Going back to my favorite saying by Warren Buffett, “You should know the deal before you accept the deal.” To get the best deal from tax planning, you have to understand taxes in these three areas.
Field
Domain
Skills
The field for tax planning is congress and them writing tax code, and how these tax laws can be interpreted now and in the future. Understanding how different parties want to tax income can help someone understand how to invest their money based on the government sentiment of the times.
The domain is all the different investment accounts and the individual securities that go into tax planning. Back when I sold financial products, there were some Long-Term Care products that could save people a lot of money in taxes and income that are not around anymore.
Then comes the skills, which are someone’s income, capabilities, human capital potential, and the tax planning professionals’ skills. Once you understand these three cornerstones of tax planning, it can help optimize your accounts so that you get to keep more of what you earn.
Now, I don’t get into the why of tax planning. I try to understand the how and the what of the tax planning because the why is out of my control. If society thinks that taxes should be a certain way, I’ll play by the rules and give advice that is in the best interest of my clients to help them live a fulfilling life that offers them upside potential and minimize their downside risks. But overall, the message is we all play by the same tax rules, and it’s up to us to take advantage of them, or else they can take advantage of us.
An Example Of Knowing The Deal With Tax Planning
A great example of people not understanding tax rules is not understanding required minimum distributions. When someone reaches the age of 72, if they have any tax-deferred accounts, the person is required to take out a certain amount of money from these accounts every year, and the amount that has to be withdrawn gets bigger every year because the divisor gets smaller.
By the time someone reaches 115, they are required to withdraw about 50% of their account values, and at 72, it’s about 3.9% of the account value. RMDs can put someone into a higher tax bracket into the future that they will have to pay taxes on. Things could change, but right now, this is how the tax laws are written and requires knowing who the players in the field of tax legislation are, the accounts and securities that people can invest in, and how to file their taxes.
The US tax code is very complicated, but someone can maximize their situation with the right strategy. So if you hear tax advice or any advice for that matter, ask what the other things you need to know when it comes to the field and domain are, and what are the skills to use that advice.
After studying the field and advice, you might find out that a person’s skill in giving advice is outdated and shouldn’t be followed. Or you can be confident that the advice is what you should follow, and it will help increase your chances of success in reaching your financial and life goals.
Keeping The End In Mind To Live Your Best Life
Overall in life, it tends to be a better strategy to focus on avoiding bad decisions than concentrating on trying to make great decisions because it just takes one wrong decision to ruin years of planning and execution.
So if you’re looking at the charts above, you don’t have to make every decision right. It’s avoiding the bad mistakes that could wipe out those gains, like marrying someone that is not a good fit for you and ends up in a big legal battle that causes someone to give up half of their accounts in the divorce. So don’t spend all your time learning tax planning if it means it will cause you to neglect your spouse and create a painful situation. Life is multi-faceted and should be focused on a perfect economy.
Don’t do too much, but don’t too little.
There is not enough time in the day to do everything, so choose the activities that will give you the best return on life. It won’t be perfect, but avoiding bad mistakes can make many perfect memories.
Hopefully, now you have more resources to help you design your best life and ask the questions to help you get there. And remember, if you hear the words “Always” or “Never,” realize that they are meaningless words and should look into the field, domain, and required skills to see what advice should be taken.
Please do your own research or contact a professional before you make any changes to your financial plan. This advice is subject to change.
For Marines, one of the best experiences is going to their first unit. When a Marine first hits the fleet after going through boot camp and MOS school, it’s their first sense of freedom. They can go out of town without having to checkout with their boss, the schedule is more flexible, and they can start to get mentored on how to lead.
They can form deep relationships with other Marines in their first unit since they will see each other in the morning for physical training, work together, and hang out after work and on the weekends since they live together in the barracks. Plus, they are in a foreign place not called home.
Then will come a time when things will change. A Marine’s time will be up with their four-year contract, and they will have to decide to get out of the Marines or re-enlist and go to a different unit which will most likely be very far away. Nothing will be like a Marine’s first unit because the expectations are lower and less responsibility. The work has fewer stakes when you’re just focused on cleaning and doing the basic grunt work and not in charge of anything yet, but they will have many great memories with their brother and sisters in arms.
I’ve heard from a lot of Marines that they miss that feeling of their first unit. When Marines get out, it can be a massive shock to their system. After all, the civilian world is so different from the Marines because the responsibility is upon them now. They have to think about medical and dental, there is no clear-cut mission, and the friends will be more dispersed. A Marine can wish all they want, but that exact feeling of the first unit will never be obtained again.
If a Marine decides to re-enlist and go to a new unit, the dynamics will change and be much different from their first unit. They are going to be responsible for things like training the next generation, the pool of folks to hang out with will be lower since hanging out with junior Marines is not supposed to happen, and the person is going to be older and might have a family now and can’t spend all weekend drinking. So that same joy is not going to be there, but a different one can take place.
How To Maintain Joy
To get this new joy, people have to remember this quote:
“If you want things to stay the same around here, something is going to have to change.” – Unknown.
To go through change is complex, and people need to realize there are seven dynamics to change, which are:
People will feel awkward, ill-at-ease, and self-conscious
People will initially focus on what they have to give up
People will feel alone even if everyone is going through the exact change
People can handle only so much change
People are at different levels of readiness for change
People will be concerned about enough resources
If you take the pressure off, people will revert to their old behaviors
For myself, I have always been goal-focused, and when I got out of the Marines after seven years of service, I had to focus on change. I went straight into school full-time, which was not a total shock since I was going to school part-time at night while in the Marines. I had a partner and family that I could rely on when I needed help.
What helped me with the change of leaving the Marines was that I had a goal and what I was giving up was not as important as what I would achieve by going through this change.
If I wanted to have the same feelings as my first unit in the Marines of having a purpose, a sense of belonging, a community, I needed to change many things about myself. I’m older now, and I should be different than the person I was ten years ago and even a year ago. Another thing that has helped me evolve is obtaining new skills and mental models for dealing with my environment. This attitude of getting one percent better every day has caused me to embrace change because something better can be on the other side of change.
How To Go Through Change
Not every change will be a successful one, but the more experiments a person can do with their life, the higher the likelihood of maintaining joy. If one can also realize that things will change on their own, then doing small experiments to increase one’s human, social, and financial capital can increase the likelihood of thriving with change. This person will be ready for the wave and surf it instead of being crushed by it.
One of the most prominent groups for divorces now is baby boomers. A lot of baby boomers are starting to retire now, and the family dynamics are changing. Now the couple is home together, and the social agreement has changed. Since males tend to have smaller social circles than females, the retired male relies on their female partner for social interactions, and they are not ready to take on this role or want to take on this role. The environment changed where they’re not working, the children have grown up, and they have more time to think about what life should be like. And if the partners are not prepared for this change, it can cause a lot of frustrations that end up in divorce.
This relationship could have been saved if they followed the quote, “If you want things to stay the same around here, something is going to have to change.” But we are creatures of habit and like to do the same thing as always, which can cause the couple to slowly grow apart until it’s too late to fix something.
To help deal with the change, it’s best to have a vision and communicate that vision to others, then create a plan to reach that vision. Then do check-ins to see if things are working or if some things need to change. It tends to be better to deal with a few changes at a time than a lot of massive changes at once. And if you follow this process, you can maintain the same amount of joy at any age because you will have new things that will give you this joy.
This path is more realistic than hoping an item from the past comes back into your life and keeps everything the same.
P.S.
This November 10th is the Marine Corps Birthday, so if you see a Marine or know one. Tell them happy 246th birthday, devil dog.
